Age rise will have effect on lending trends: economist
The mortgage market will have to change its approach to lending to meet the needs of Northern Ireland's ageing population, an economist has said.
Professor Neil Gibson, who was addressing a celebration of the centenary of the Progressive Building Society, said the number of people aged 65 and over was set to rise by 25% in the next 10 years.
Mr Gibson, director of the Northern Ireland centre for economic policy at the University of Ulster, said economic growth in Northern Ireland was likely to continue until 2015.
But he added: "The picture beyond that is less certain with the potential for rising interest rates and Northern Ireland's ageing population which will affect lending and borrowing trends.
"If people are living longer any inheritance that may have previously been left to children or equity available to use as a deposit for a first home, will no longer be available."
Such trends would have to be taken into consideration by lenders, Mr Gibson said.
"Financial institutions will need to address these challenges by offering financial planning, not product selling, and ensure first-time buyers are much better informed and have total clarity of the lending process," he said.
The Progressive recently announced pre-tax profits of £5.7m and is due to merge with the City of Derry Building Society, which will leave Progressive as Northern Ireland's only home-grown building society.
Chief executive Darina Armstrong – who is the society's fourth chief executive over its 100 years of existence – said she believed it was "well placed" to deal with the changes to lending which the ageing population would bring.
"We do not believe in over-complicating our products and we do not hide behind confusing terms and conditions," she said.
She said the society's key focus for 2014 would be "to provide security for our members and build on our financial strength".
"The merger with the City of Derry will also be a key priority for us and will enable the members of both societies to benefit from the financial strength of the combined society.
"Our values which we've had for 100 years will remain and we will continue to operate as we always have – as a traditional building society, offering good value savings and mortgage products and excellent customer service for the benefit of our members."